March is Women’s History Month, a time to celebrate the achievements and contributions of women throughout history. At Loeffler Financial Group, we’re proud to honor the women who have shaped the field of accounting, paving the way for future generations. This year, we highlight some trailblazers whose impact continues to resonate today.
1. Maria Gaetana Agnesi (1718-1799)
Maria Gaetana Agnesi was an Italian mathematician and philosopher who wrote the first book discussing both differential and integral calculus. Her work, “Analytical Institutions for the Use of Italian Youth,” was a groundbreaking achievement and contributed significantly to the understanding of calculus. Agnesi’s dedication to education and mathematics laid a foundation for women in STEM fields.
2. Mildred Dresselhaus (1930-2017)
Known as the “Queen of Carbon Science,” Mildred Dresselhaus was an American physicist and electrical engineer. Her research focused on the electronic properties of materials, particularly carbon, and she made pioneering contributions to the field of nanotechnology. Dresselhaus was the first female Institute Professor at the Massachusetts Institute of Technology (MIT) and served as a role model for women pursuing careers in science and engineering.
3. Mary Harris Thompson (1832-1923)
Mary Harris Thompson was an American pioneer in accounting and taxation. She founded one of the first professional accounting firms in the United States and played a crucial role in shaping early accounting practices. Thompson’s advocacy for rigorous standards and professionalism in accounting laid the groundwork for the modern accounting profession.
Loeffler Financial Group: Empowering Women in Finance
While Loeffler Financial Group is owned by men, we take pride in the fact that our company is largely d
riven by strong, intelligent women. From leadership roles to client management and financial planning, women at Loeffler Financial Group are integral to our success. They bring diverse perspectives, innovative ideas, and a commitment to excellence that defines our approach to client service.
As we celebrate Women’s History Month, we recognize and celebrate the contributions of women in accounting and finance. Their resilience, intelligence and dedication continue to inspire us at Loeffler Financial Group and beyond. Join us in honoring these remarkable women and reflecting on their impact on our industry and society.
At Loeffler Financial Group, we believe in empowering women in finance and celebrating their achievements every day.
As the year draws to a close, many small business owners are focused on holiday sales, planning for the new year, and taking stock of their yearly performance. One powerful tool to support this effort is the year-end financial audit. Although audits can seem daunting, they provide valuable insights, ensure compliance, and help identify both risks and opportunities that could significantly impact your business’s future.
In this post, we’ll discuss what a year-end financial audit entails and the benefits it offers for small businesses, particularly in terms of financial planning and strategic growth.
What Is a Year-End Financial Audit?
A year-end financial audit is an independent, thorough review of a company’s financial records, policies, and systems. The primary goal is to verify that your financial statements accurately reflect the true state of your business, offering a clear view of its financial health. Audits are typically conducted by third-party professionals to ensure objectivity and accuracy.
An audit might cover:
Reviewing financial statements and verifying assets, liabilities, income, and expenses
Examining internal controls to assess how well your business prevents errors or fraud
Identifying compliance issues, particularly related to tax regulations and industry standards
Offering recommendations for areas of improvement
The scope of an audit may vary depending on the size and needs of your business. While large corporations often require audits for compliance, small businesses can benefit equally from an annual audit to maintain financial accuracy, improve operational efficiency, and support decision-making.
Benefits of a Year-End Financial Audit for Small Businesses
1. Ensures Compliance with Financial Regulations
One of the biggest benefits of a year-end audit is ensuring your business complies with relevant tax laws and industry standards. Audits review how accurately your financial statements reflect your income, expenses, and liabilities. This reduces the likelihood of unexpected issues, such as penalties from tax authorities or costly fines. Staying compliant also builds your reputation as a trustworthy business, which can be especially important for securing financing or attracting investors.
2. Identifies Financial Risks and Reduces Fraud Potential
During an audit, professionals will evaluate your internal controls—essentially, the checks and balances that help safeguard your assets and prevent fraud. They’ll identify weaknesses in your processes that could make your business vulnerable to risks, whether that’s through mismanagement, bookkeeping errors, or even fraud. Detecting these risks early means you can implement better control mechanisms and avoid financial losses down the line.
3. Uncovers Opportunities for Cost Savings
Auditors can also identify areas where you may be overspending or not managing resources efficiently. By thoroughly examining expense categories and cost controls, auditors often uncover opportunities for reducing overhead costs. These insights are particularly valuable when budgeting for the next year, allowing you to allocate resources more effectively and boost profitability.
4. Provides a Clear Picture of Financial Health
The year-end audit is like a “financial health check” for your business. Auditors ensure that all financial data is accurate and properly categorized, giving you a clear understanding of your company’s true financial position. This clarity is especially useful when setting goals, as you can make data-backed decisions on growth, hiring, and capital investments.
5. Improves Business Planning for the Upcoming Year
When you have a detailed, verified financial report from an audit, you can create a more precise budget and realistic projections. Knowing exactly where your business stands financially enables you to set achievable goals, allocate resources wisely, and plan for potential challenges. The audit process often reveals valuable insights, such as trends in revenue or expenses, which can guide strategic decisions for the coming year.
6. Enhances Credibility with Lenders and Investors
If you’re planning to apply for financing or seek investors in the near future, an audit can be a game-changer. A professionally audited financial statement demonstrates financial responsibility and transparency. Lenders and investors are more likely to trust a business that has taken the time to verify its financials, which may lead to better financing terms or attract investment to fuel your growth.
What to Expect During a Year-End Audit
A typical year-end audit will involve several stages:
Preliminary Review: The auditor will familiarize themselves with your business and financial practices, assessing key areas of risk and understanding your operations.
Testing and Verification: The auditor will then verify your financial data through a combination of sampling and detailed testing. This could include confirming the accuracy of your accounts payable and receivable, verifying inventory counts, and reviewing payroll expenses.
Internal Control Assessment: Part of the audit involves reviewing the effectiveness of your internal controls. If gaps are found, auditors will recommend improvements to enhance accuracy and security in future financial reporting.
Audit Report and Recommendations: At the end of the audit, you’ll receive a detailed report outlining the findings. This includes an evaluation of your financial statements, identified issues, and recommendations for process improvements.
While some small businesses worry about the time and cost of an audit, many find that the benefits outweigh these factors. A financial audit doesn’t have to be overly disruptive, especially if your financial records are already organized.
How to Prepare for a Year-End Audit
To maximize the benefits of your year-end audit and streamline the process, consider the following steps:
Organize financial documents in advance, ensuring that your balance sheet, income statement, and cash flow statements are accurate and up-to-date.
Review your internal controls and conduct a preliminary check for any obvious gaps or errors.
Reconcile accounts and make sure everything is properly categorized. This includes payroll, revenue, and expenses.
Consult with a professional early in the process to address any questions you may have about the audit scope and requirements.
A year-end financial audit
A year-end financial audit is an invaluable tool for small businesses looking to improve compliance, assess financial health, and plan effectively for the future. By identifying risks, enhancing credibility, and uncovering growth opportunities, an audit helps you enter the new year with a clear financial strategy. Whether you’re preparing for growth, seeking financing, or just aiming for better financial clarity, a year-end audit can support your business’s success.
Ready to start the year strong? Consider scheduling your audit soon, and contact us at Loeffler Financial Group to learn more about how a year-end audit can benefit your business!
If you own a small business, you need an accountant. Small business owners tend to file their taxes with a free online tax services year after year, but a digital solution can only take you so far. A tax accountant, or should we say a real accountant is an essential part of your small business team.
But why make the switch now? COVID-19.
Various COVID relief bills were passed in 2020 and 2021, which mostly affected the small business sector. With these new bills and laws, some of the previous ones passed were then overturned, making this years 2020 business taxes a little more complex. You certainly want to talk to an accountant if your business qualified for some of the various forms of government and private support and tax benefits this year.
The various forms of government assistance and tax benefits announced in 2020 were unbelievably confusing.
Here are just a few of the government programs and policies that might affect your 2020 small business taxes:
Paycheck Protection Program
Economic Injury Disaster Loans and EIDL loan advances
Employee Retention Credit
Any support from other governments or organizations
But a good accountant is more – much more – than a tax preparer. A good accountant is your small business advisor, not just a tax advisor. He or she should be able to help you deal with all the major financial issues your small business faces and advise you on how to insure your personal financial well-being. Our accountants at Loeffler Financial Group can help guide you on how to handle the financial matters, including the accounting and money handling systems of your business. Our team also will help guide you on ways to structure investment, personal loans, and losses to get not only the best tax treatment but to better manage my cash flow.
What kinds of taxes will I have to pay? What are my tax deadlines?
How can I reduce my taxes?
Which expenses are deductible, non-deductible or have to be depreciated?
What kind of bookkeeping system should I set up?
How can I set up systems to reduce the possibility of theft or embezzlement?
How should I pay myself and what are the tax implications?
Should I use the cash or accrual form of bookkeeping?
Do I need to keep track of inventory? If so, what method do I use?
How do I handle payroll and payroll taxes?
Do I have to collect sales tax? When? From whom?
What kind of retirement program can I set up and how much can I contribute each year?
What other accounting and tax considerations are there for my type business?
A good small business accountant can save you more money in the long run, and help you lower your taxes! Although the deadline for taxes has been extended to May 17, 2021, you want to start gathering your files, and book your appointment today!
If you’re a sole proprietor, you have probably wondered at some point whether you’d be better off if you incorporated your business. Here are some facts for you to consider.
The single biggest benefit of incorporating a business is limiting an owner’s liability. In theory, a stockholder in a corporation risks only his or her investment in the corporation stock. A lawsuit against the company generally cannot be satisfied by attaching the stockholder’s personal assets. In practice, most small corporation stockholders must personally guarantee bank loans for their corporations. Thus, if the corporation fails, the stockholder’s personal assets are at risk. In addition, where personal services are involved, the individual performing the services may be personally liable for his or her actions even though the business is incorporated.
The second advantage of operating as a corporation is that it may be easier to raise capital because the business can do so by issuing stock and selling bonds.
A third advantage is that ownership interest in a corporation is easier to transfer than in a sole proprietorship.
A corporation files its own tax return and pays its own income tax. Therein lies the major drawback to the corporate form: business profits may be taxed twice – once at the corporate level and again at the shareholder level when paid out as dividends or liquidating distributions. Double taxation can generally be avoided by electing S corporation or LLC status.
The corporate form does allow for more fringe benefits that are deductible by the corporation and tax-free to employees, including an owner-employee.
No business owner should incorporate without carefully considering the pros and cons of doing so. Loeffler Financial can help you review the pros and cons, and guide you the direction that best suits you and your business needs, Contact us today at 717-393-7366.
